Bank bonuses are a big topic for people and businesses in the financial sector, but for the average person it is a little bit more complicated. 

What you need for a bank bonus is the amount you get when you contribute to the bonus plan.

If you get more than your share, you will get nothing, but if you are under the bonus and get less than the bonus you will be taxed on your extra money. 

The Bank of England defines a bonus as an amount that is the “maximum rate that the Bank of Scotland would pay” for the same account.

If the bank gives you more than the amount that the bank is paying, you can be liable to tax on your bonus.

The best way to know what your bank is offering is to use the Bank’s website to find out the minimum bonus you can expect to earn.

The Bank of Edinburgh says you should not be taxed at the bonus if you get less, and the Bank said you should be taxed if you earn more than what your bonus would be if you were earning the maximum rate. 

Bank bonuses are tax-deductible if you have more than £250,000 in savings and a taxable account with the Bank, but this depends on your individual circumstances.

If your savings exceed £250K, you are not liable to be taxed, but your taxable account could be taxed up to 50% if you had a taxable savings account with an outside bank. 

However, if your savings are more than that, you may be liable for a higher rate.

This could be because your savings could have been used to buy property, for example. 

If you have a taxable personal account with a bank that is not your own, you should consider whether you should have your bonus taxed at your account rate.

You could, for instance, pay a penalty if you overpaid your bonus in the past. 

It could also depend on the account you have.

If an outside company owns your account, you could be liable.

This is because it will take the full amount of the bonus from your account and if you paid less than that you could lose the bonus. 

To find out more about tax, visit the Tax Information Centre. 

More: This post is part of a series: Bank bonuses, bonuses, bank bonuses: what you need, where to find more information, and how to take action